County Commission Weighs Fairgrounds Opposition

By Bill Dries

The relationship between city and county governments long has included overlapping interests with sometimes opposing positions on those interests.

Throw in years-old agreements involving real estate, and you have a recipe for uncertainty about how to resolve the differences to meet new arrangements.

When the commission meets Monday, Jan. 27, a resolution calling on the Tennessee Building Commission to reject the city’s application for a Fairgrounds Tourism Development Zone will be on the agenda.

Shelby County Commissioners are scheduled to vote Monday on a resolution urging the Tennessee Building Commission to reject city government’s move for a Tourism Development Zone to finance the redevelopment of the Mid-South Fairgrounds.

(Daily News File/Lance Murphey)

The commission meets at 1:30 p.m. at the Vasco Smith County Administration Building, 160 N. Main St.

The Tourism Development Zone application resolution is a disagreement over the impact the zone would have on sales tax revenue captured within the 3-square-mile zone that now goes to fund local public education without such a zone.

Shelby County Mayor Mark Luttrell and Memphis Mayor A C Wharton Jr. have been talking for several weeks privately about the issue.

Despite Wharton’s assurances that the TDZ will not impact the share of the sales tax that goes to education, Luttrell remains concerned the zone could take the share of any increased sales tax revenue generated by a redeveloped Fairgrounds that would otherwise go to fund local schools.

The commission delayed a vote on the resolution by Commissioner Steve Basar earlier this month to give Luttrell and Wharton time to talk further about the issue. Luttrell has said his administration does not want to block the city’s plan for the Fairgrounds.

Luttrell also said any disagreement between the two governments would probably lead state officials in Nashville to at least delay the city’s application until there is some kind of unanimity.

But Basar’s objection to the city’s application goes beyond the question of sales tax revenue for education, although he refers to the zone as a way to “poach” sales tax revenue.

In a guest column for The Daily News last week, Basar questioned the city’s premise for Fairgrounds redevelopment, including retail to generate sales tax revenue to help finance the overall project, which includes public recreation facilities.

“The idea of using retail as a ‘tourist magnet’ defies logic,” Basar wrote. “The reality is that bricks-and-mortar retail is in decline. … The existing plan is over eight years old. Perhaps it made business sense at one time, but much has changed.”

Backers of the redevelopment plan argue the city is not directly involved because it would appoint a project manager for retail and residential development.

Meanwhile, the commission has delayed a vote Monday on a resolution that is a part of the city’s plan to buy AutoZone Park and, with it, have the St. Louis Cardinals buy the Memphis Redbirds baseball franchise.

In 1998, city and county governments bought the land that the ballpark was built on at Third Street and Union Avenue for $8.5 million, split evenly between the two governments as part of a joint agreement for the ballpark’s development.

County government didn’t take title to the land or any role in development or management of what followed there. But the city agreed that county government would get half of any available profit from the stadium. There has been no profit under terms of the interlocal agreement.

The resolution before the commission would have county government “relinquish whatever interest that it has in the property to the city.” In exchange for that, the county still has a right to half of any available profit from the ballpark and is indemnified from any liabilities.

Shelby County government also gets a $462,000 annual payment through a payment-in-lieu-of-taxes agreement for tax breaks the William R. Moore Building and attached parking garage received as part of the construction of the ballpark.

The original agreement was that the payment would go back into the debt service from the ballpark’s construction. The city wants the county to continue that assignment to the debt service from the new financing of the ballpark, approved by the Memphis City Council earlier this month.

In committee sessions last week, commissioners said they wanted a closer look at the details of the ballpark deal as a whole.

Assistant City Attorney Marcus Ward told council members earlier this month that the city and county were supposed to jointly own the Moore Building but that it wasn’t clear if that was ever formally done. Asked what would happen if the county didn’t agree to the new arrangement, Ward said the city would “have to proceed under joint ownership and address those issues at that time.”